The U.S. Securities and Exchange Commission has accused 27 individuals and businesses of stock fraud, according to the Tampa Bay Business Journal, including former ImmunoCellular Therapeutics Ltd. chief executive Manish Singh.
According to the Securities and Exchange filing, from August 2011 to March 2014, Singh engaged in a fraudulent stock-promotion scheme involving 12 publicly trded companies, at least 10 writers and more than 400 online publications as well as the dissemination of emails to thousands of potential investors.
At the time, Singh was chief executive of two publicly-traded companies, ImmunoCellular of Calabasas and Lion Biotechnologies Inc. of San Carlos. He worked with stock promotion firm Lindigo Holdings to pay and distribute articles that may have contained false or misleading statements with the aim of inflating stock price, according to the Securities and Exchange Commission.
ImmunoCellular, through Singh, paid Lindigo $5,000 a month for these services, which accumulated to more than $230,000 between September 2011 and August 2012, according to the government agency.
In turn, Lindigo allegedly paid its writers to publish articles about ImmunoCellular on sites such as Seeking Alpha and Bezinga. The articles did not disclose the compensation from ImmunoCellular, which develops cell-based therapies against tumors.
“The market was led to believe that the company’s clinical studies for its product candidate ICT-107 were going well and the share price was artificially inflated,” as stated in an investor notice from Irvine law firm Khang & Khang, which is working on a class action lawsuit against ImmunoCellular, along with several other firms. “Upon release of this news to the public, ImmunoCellular’s stock price declined materially, which harmed investors, according to the complaint.”
ImmunoCellular (IMUC) shares closed up 1 cent, or less than a percent, to $1.52 on the New York Stock Exchange.